Hamilton Lane (NASDAQ:HLNE) versus Moody’s (NYSE:MCO) Head-To-Head Review

Moody’s (NYSE:MCO) and Hamilton Lane (NASDAQ:HLNE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Moody’s and Hamilton Lane, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moody’s	0	7	14	0	2.67
Hamilton Lane	0	2	7	1	2.90

Moody’s currently has a consensus price target of $555.74, suggesting a potential upside of 14.75%. Hamilton Lane has a consensus price target of $124.62, suggesting a potential upside of 49.25%. Given Hamilton Lane’s stronger consensus rating and higher probable upside, analysts clearly believe Hamilton Lane is more favorable than Moody’s.

Profitability

This table compares Moody’s and Hamilton Lane’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moody’s	34.25%	80.35%	19.38%
Hamilton Lane	32.14%	25.10%	15.75%

Insider and Institutional Ownership

92.1% of Moody’s shares are owned by institutional investors. Comparatively, 97.4% of Hamilton Lane shares are owned by institutional investors. 0.1% of Moody’s shares are owned by insiders. Comparatively, 24.0% of Hamilton Lane shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Moody’s pays an annual dividend of $4.12 per share and has a dividend yield of 0.9%. Hamilton Lane pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Moody’s pays out 26.1% of its earnings in the form of a dividend. Hamilton Lane pays out 36.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Moody’s has increased its dividend for 16 consecutive years and Hamilton Lane has increased its dividend for 8 consecutive years.

Risk and Volatility

Moody’s has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Hamilton Lane has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Earnings & Valuation

This table compares Moody’s and Hamilton Lane”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moody’s	$8.16 billion	10.28	$2.46 billion	$15.77	30.71
Hamilton Lane	$758.99 million	6.11	$249.18 million	$6.56	12.73

Moody’s has higher revenue and earnings than Hamilton Lane. Hamilton Lane is trading at a lower price-to-earnings ratio than Moody’s, indicating that it is currently the more affordable of the two stocks.

Summary

Moody’s beats Hamilton Lane on 12 of the 18 factors compared between the two stocks.

About Moody’s

Moody’s Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody’s Analytics and Moody’s Investors Services. The Moody’s Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and SaaS solutions supporting banking, insurance, and know your customer workflows. The Moody’s Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as structured finance securities. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody’s Corporation in September 2000. Moody’s Corporation was founded in 1900 and is headquartered in New York, New York.

About Hamilton Lane

Hamilton Lane Incorporated is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, mezzanine in growth capital companies. It prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. The firm prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and Caribbean, United States of America, and Canada. The firm prefers to invest between $1 million and $100 million. It prefers to take majority stake. Hamilton Lane Incorporated was founded in 1991 and is based in Conshohocken, Pennsylvania with additional offices across Europe, North America, Asia Pacific and the Middle East.